Employ the contracts of advanced financial options to build hedge portfolio - An Empirical Study in the Iraqi banking sector

Abstract

Become the use of financial engineering tools and options contracts more contemporary topic in the field of financial management, there has been handled explosive growth during the last quarter of the twentieth century as a result of economic developments across the world, opening world markets and increased competition.This development coincided with the uncertainty of what will be the price of the present in the future and that leads to incur losses and exposure to risk any risk of market prices if prices moved other than what is desirable or expected.On the basis of that came this study provides a framework of knowledge and application of the nature and how to employ options contracts to hedge against price fluctuations present and future, and then get rid of the resulting losses and reduce the risk of price fluctuations, respectively, as well as its importance in the areas of speculation by investing little money for trading in financial market for the purpose of making profits due to price fluctuations.Based on the foregoing the importance of the study through the adoption of mathematical models and applied advanced, have wide uses in the field of options in the global financial markets efficient, and to try out in the Iraqi capital market, in an environment of Iraqi private banks.